Money matters

National Review, June 22, 1992

The LARD in California's budget would give Jenny Craig nightmares. The state faces a nightmare deficit of $11 billion or more. Sacramento's fiscal conservatives can approach that red-ink Niagara with fear and trembling--or they can view the crisis as an opportunity, a chance to press the case for true reform.

So far, Governor Wilson has been less than visionary. His advisors acknowledge the need for quick, deep cuts in outlays, but why not a long-term strategy for structural streamlining as well? The Reason Foundation, after looking at just a few state services, prisons in particular, identified hundreds of millions in costs that could be shed by privatizing. Applying that concept throughout state government--and imposing it on localities that get state funds--would boost efficiency by orders of magnitude. Additional savings could be won by consolidating or gutting overlapping agencies, the Franchise Tax Board and the state Board of Equalization, to name two biggies that duplicate each other, and slimming down public-employee pensions so they're in line with the private sector's. Assemblyman Tom McClintock estimates that a thorough rationalization of state government could save $27 billion.

Liberals in the legislature would balk at a blueprint for reform, of course. But what an opportunity for Wilson and the Republican leadership to define themselves against the the big-spending status quo. Private industry has had to downsize; when will it be government's turn? That's a question California's GOP ought to be eager to carry to voters.